Running a used diesel car is only cheaper if you drive more than 10,000 miles a year

Second-hand diesel car prices have been driven up to the point where buyers who opt for one over a petrol model are wasting money unless they drive more than 10,000 miles per year, a motor industry expert has warned.

New and used diesel cars have surged in popularity in the last few years as more motorists turn to them over their petrol counterparts as a cost effective way to drive.

But their typically better fuel economy is offset by being more expensive, whether used or new, and car valuation expert Glass’s Guide says unless drivers do 10,000 miles a year for a used car and 6,000 for a new car, they will not recoup the cost.

Diesel vs unleaded: Diesel motors have become more popular in recent years - but according to Glass's, it is only beneficial fuel wise if you drive over 10,000 miles a year

Diesel car sales boom but are they really cheaper?

Contrary to popular perception, Glass's says the price gap between a petrol and a diesel is actually bigger for a used rather than new car - at £2,000 compared to £1,300.

According to official figures
by the Society of Motor Manufacturers and Traders (SMMT), a total of
981,594 new diesel cars were sold last year, outselling petrol models
for the first time.

As well
as new diesel models proving popular, the second hand diesel car market
has also picked up momentum in the wake of soaring petrol prices – more
car buyers are turning to diesel motors to try and save money on fuel
bills.

But the million dollar question is this - does better fuel consumption mean they are more cost effective to drive than unleaded motors?

Well according to research Glass’s Guide, the answer is no - unless you drive over a certain number of miles a year.

It has found that motorists need to drive more than 10,000 miles annually in its typical used car for a diesel to be more cost effective than a petrol one.

Meanwhile, they would have to do 6,000 miles in a new vehicle

The figure is based on car values and fuel costs. It bases them on owning a vehicle for a typical three-year period and uses the price of three-year-old vehicles for its used car model.

Used diesels are even more expensive

Both new diesel and used diesel models command a strong price premium over similar petrol models.

The average cost of a new family-sized car which runs on diesel is £1,300 more than its petrol equivalent.

But due to increased demand, this is magnified in the second hand market where the average three-year old family car is £2,000 more than the same petrol model.

This means that if a motorist buys a three-year old diesel and drives less than 10,000 miles a year, it is unlikely that the driver will recover the money over an average three-year length of ownership, according to Glass's.

Buy a new diesel and you will have to do much less mileage - racking up just 6,000 to break even.

While increasing fuel prices have had a significant impact in diesel popularity, demand has also been driven by the advancement of diesel engine technology which has led to a less compromised driving experience.

In many cases today, diesels run as quietly and smoothly as petrol equivalents. This was not the case a decade ago, and additionally, diesel motors offer some practical advances over petrol models, such as better pulling power (as measured by torque figures).

How Glass's crunched the numbers

Glass’s predicts that the price gap between diesel and petrol cars is now likely to remain constant.

Diesel: Prices are currently over 5p a litre more expensive than unleaded

Adrian Rushmore, Glass’s Guide managing editor, said: ‘More and more used diesels are coming on to the market and with new diesel car sales surpassing petrol last year, we’re only going to see an increase in the amount available on the second hand market.

‘This increased availability should stop used car prices rising too much further. Sooner or later, buyers will also cotton on to the fact that you actually have to do a fairly significant amount of miles – 10,000 or so – to recoup the cost.

‘The 10,000 mile figure is based on averages of hundreds of thousands of car prices and current fuel prices. This is the ‘magic number’ consumers should use to guide their choice - if you’re driving 5,000 miles for example, you definitely don’t want to buy a diesel on economic grounds.’

Diesel at the forecourt is also more expensive than unleaded and has escalated in price faster than unleaded in recent years.

Yesterday, AA figures found that the average unleaded price is at 142.26p a litre while diesel prices are now
over 5p higher at 147.76p.

And insurance is more expensive too

It's not just the mileage and fuel costs you need to factor in, insurance is more expensive for diesel cars as well.

Adrian Webb of insurer esure,
says: 'A diesel will typically cost ten
to 15 per cent more to insure than an
equivalent petrol car. It has higher
average accident repair costs,
especially if the turbo intercooler is
damaged. And many diesels have
twin radiators, which are more
vulnerable in a head-on collision.’

Insurers must also factor in the
higher overall replacement cost if a
diesel is stolen. And as they have
improved and become smoother and
more powerful, underwriters no
longer view diesels as a less sporty
alternative to petrol models.

What do you think? Is diesel better than petrol and is Glass's right? Tell us in reader comments below.